Updating post from Reddit.
I own a leasehold flat and have had the same tenant via a housing association for the past 9 years. The contract has been on a 1 month rolling basis since 2019. No rental increases in that time, because:
- The building had major scaffolding works to replace cladding, and it felt like a d*ck move to put through an increase.
- The rent offset all monthly expenses so was marginally profitable, and I was fine to break even.
- I earn over £100k so the additional rental income screws with my self assessment and child benefits.
The housing association (who pays me directly) is claiming that, although my rent is guaranteed, they can't pay until the local council pays them - and with councils struggling, they haven't received the money. I'm now 2 months out of rent and have been fobbed off for 6 weeks on when it will arrive.
I'm selling the property soon, and with a 1 month rolling contract, I won't have to give much notice. However, with the Renters Reform Bill coming into effect soon, and the housing association essentially getting free accommodation out of me (they claim the issues will run until September but it's been a good 15 months of delayed payments already), I am considering a repossession order and threatening to take them to court for the outstanding monies.
The dilemma...the housing association placed a single mother with a child (probably about 10-11 now) who has been in the flat for 9 years. I don't want to turf her out, she's kept the place in good nick and caused me no trouble, and I'd feel really bad giving her 1 month's notice.
How should I play this? My overriding priority is to ensure that I can get my flat back so it sells before all the reforms come into effect.
Correction: It is a rolling one-month rental agreement, but would then be 2 month's notice. (England).
Good luck getting it back at all.
There was a case not too long ago where someone had leased their property to the council, but at the end of the contracted period, the council had someone living there and they hadn't got anywhere else to put her, so they didn't return the property and there was nothing the owner could do.
Well that's thrown a spanner in the works.
>I'd feel really bad giving her 1 month's notice.
Assuming you're in England, one month's notice is automatically invalid; It would need to be at least two months for a section 21 notice.
Shorter for a section 8, but that will just be defeated when the HA pulls their finger out and pays the arrears.
Serve section 21, now. Rent not being paid for 2 months can allow you to serve a section 8 as well. Also, take the council to court.. MCOL
Would an alternative be to put through an obscene price hike from £1,200 to £2,400...knowing they won't pay and they'll either:
Decide to give the property back
Take them to court claiming they haven't paid £2,400 for x months?
There are rules and guidance around price hikes. Easier to get on with the eviction notices and MCOL, imo
Ok thank you
Why not both?
I said both in my earlier response
You need to serve notice earlier than later if you want to sell. Just because you have served notice does NOT mean the tenant has to leave. It is a request, if they refuse they you could be in for a lengthy court battle for an eviction notice. Given the state of the rental market, the housing association may advise the tenant to stay put as long as possible as if the tenant leaves without an eviction notice they will de-prioritise themselves for future accommodation.
Also check your notice period. 2 months is typical, 1 month less so.
2 months is the legal minimum
Serve a section 21 notice and let it run it’s course.
Can you sell it to the housing association?
Didn't even think that was an option tbh, given how they cheap they behave.
Worth asking them.
So you have a AST with the tenant or a lease agreement with the HA?
It's a lease agreement with the HA. It expired in Nov 2019 and has been on a rolling one-month basis ever since
>The dilemma...the housing association placed a single mother with a child (probably about 10-11 now) who has been in the flat for 9 years. I don't want to turf her out, she's kept the place in good nick and caused me no trouble, and I'd feel really bad giving her 1 month's notice.
Are you saying you want to sell the property vacant or you want to sell it tenanted?
You can do either but you can't have it both ways. Either evict the tenant and risk receiving no income from it until you sell as vacant possession, or sell tenanted, but you can expect less for the property as it will only be suitable for investors who want a tenanted property.
No sensible buyer looking to live there and relying on a mortgage will bother making an offer on a tenanted property. If the tenant doesn't leave of their own volition it will take months to get an eviction enforced.
Your argument with the council about payment is separate.
If you want to sell tenanted, I would still be tempted to issue a s8 just to get the HA to pay up on the arrears.
Know that if you evict the tenant, the HA will probably be advising them to stay until you get a court order enforcing the eviction. Most councils won't help with housing until the tenant is actually forced to leave and if the tenant leaves sooner they will be treated as making themselves voluntarily homeless and so not eligible for council assistance.
I suppose it's an unknown in regards to who the buyer will be. The rent is also cheap (~£1,200) for the area (~£1,500), so it's not in a new landlord's interest to commit to the deal.
I was trying to be nice about this by minimising disruption for the tenant but it feels like anything other than an S21 immediately can screw me.
>I suppose it's an unknown in regards to who the buyer will be.
Not if you make a decision about who you want to market it to. Plenty of properties get listed with sitting tenants as investment properties.
If you market with a sitting tenant but trying to get full market value for selling it as a home, you're getting the worst of both worlds. Buyers will be put off by the tenant, landlords will be put off by the price.
Plenty of properties get sold with sitting tenants, but you need to realistic about what you want.
If selling to a landlord then they will consider the current rent but is hardly going to be a deal breaker, because they can just put the rent up after the purchase.
Ok, thank you
This all assumes that the tenant is not in a fixed term.
If they are in a fixed term, you can't issue a s21. Realistically a s8 won't go far because the HA will pay the arrears. So if in a fixed term all you can do is sell as an investment property and price accordingly. Or wait until the fixed term ends and then evict.
Edit: NVM I see that the tenancy is periodic.
Is your contract with the Housing Association or the Tenant? It sounds like its with the HA.
If its with the Tenant then a Section 21 is the route. If its with the Housing Association, check the contract on how to terminate it.
> Housing association delayed payments for 2 months (citing council funding issues), with delays ongoing for 15 months.
Time to give them a CCJ, we dont care about their funding problems. The money is due and they are under contract?
You probably want proper eviction specialist legal advice.
It's with the HA.
Then you need to ignore the comments saying "Section 8" or "Section 21" or your own thoughts on increaseing rent.
You have no landlord relationship with the tenant, the tenants landlord is the housing association. You have a B2B commercial agreement with a Housing Association. You therefore need to check the contract with the Housing Association on how to end the agreement.
The fun part, is if the Housing Association can re-house or evict the tenant, in order to offer you vacant possession.
You're probably going to need proper eviction specialist legal advice.
Ok thank you
Letter before action to the housing association assuming your contract doesn't include you taking on the credit and cash flow risk of the council / HA agreement.
Sorry, can you elaborate on credit / cash flow risk of the council / HA agreeent?
Just curious to know, which Council is this flat in? For your sake I desperately hope it isn’t Birmingham seeing as they’ve recently declared bankruptcy!
No thankfully not, although a lot of councils have precarious financials